Celebrity Endorsements – The Fame, Blame or Shame Game

In January, Ace Metrix released a report questioning the relative value of celebrity endorsements (“Celebrity Advertisements: Exposing A Myth Of Advertising Effectiveness“). Just last month, a new study, co-sponsored by Ketchum and conducted by the Nielsen Company and BlogHer, took a look at social media trends among women and found online women were almost twice as likely to be influenced to consider a product based on a blogger they follow, rather than a pitch from a celebrity (2011 Social Media Matters Study).

Most of us understand that a few seconds of exposure on Oprah can mean the top of the best seller list, but celebrity steps and mis-steps can often pose, shall we say, “challenges,” for a brand. Celebrities such as Tiger Woods, Charlie Sheen, Lindsay Lohan and a host of others have seen their ups and downs. Correspondingly, advertising-endorsement considerations when dealing with any celebrity can be a mixed bag, depending on timing, relevance, image and a host of other factors—many outside the sponsor’s control. Sometimes neutral and other times negative, these recent studies suggest there are fewer success stories than one might otherwise assume.

Does this mean the end of celebrity endorsements? Probably not. But it may mean advertisers and agencies will become more selective and objective in evaluating the cost of promotions involving celebrities. Someone suggested celebrities should be compensated based on the “performance” of the advertising. First of all, that’s nothing new. However, in case you are wondering—and to throw in a quick legal byte—if a celebrity has a financial interest in the outcome of advertising involving that celebrity, yes, Legal Bytes has already noted that the FTC has an “app”etite for that: FTC (Revised) Endorsement Guides Go Into Effect.

The Advertising Technology & Media law practice group at Rimon has lawyers with decades of experience in working with advertisers and agencies handling matters involving celebrity endorsements—the good, the bad and, sometimes, the ugly. Let us know if you need us. We are happy to help.